Published name
Upload a submission
Brickworks Limited
ABN:17 000 028 526
Level 9, 60 Carrington Street
Sydney, NSW 2000
(02) 9830 7800
30 November 2021 info@brickworks.com.au
www.brickworks.com.au
ERF Methdology Development
Clean Energy Regulator
Via Email: methoddevelopment@cleanenergyregulator.gov.au
Dear Sir or Madam,
Re: Biomethane Method Package Consultation
Brickworks Limited (“Brickworks”) welcomes the opportunity to comment on the Biomethane
Method Package consultation.
Brickworks (ASX:BKW) is Australia’s leading domestic manufacturer of building products.
Brickworks owns Austral Bricks, which produces more than 500 million bricks each year in
Australia. Brickworks is a large consumer of natural gas, consuming approximately 4 PJ of
natural gas in Australia each year. Austral Bricks combust natural gas to produce a high heat
of over 1,000 degrees Celsius in the kilns to fire bricks, which is a process that can not be
electrified. We are focused on sustainability and have recently commenced a feasibility study
with Delorean Corporation to assess the construction of anaerobic digestion facilities next to
our brick plants to produce biomethane from organic waste. We have experience consuming
biogas at two of our Western Sydney brick plants, where biogas is transported by pipeline from
nearby landfill gas facilities directly to our plants. Brickworks hopes that biomethane production
from purpose-built anaerobic digestion facilities will enable the company to further reduce our
emissions by reducing our use of natural gas.
1. Draft Biomethane Methodologies
1.1. General Biomethane Methodology Required
Brickworks commends the Clean Energy Regulator’s (“CER”) work in developing biomethane
methodologies to recognise the emission reduction potential of anaerobic digestion
technologies. However, we note that the proposed draft methodologies under the Biomethane
Method Package are narrowly defined and have limited application. Specifically, the eligible
waste methods are restricted to anaerobic digestion that:
- utilises animal effluent or,
- utilises wastewater, or
- is co-located at a landfill site.
The additional two methods that the CER is seeking feedback on could also allow ACCUs to
be created from anaerobic digestion that is connected to:
- processing solid waste, or
- separating organic waste.
Brickworks does not believe any of the proposed five methodologies cover the scenario where
a stand-alone anaerobic digestion facility receives a combination of solid and liquid organic
waste to produce biogas and/or biogas upgraded to biomethane. We suggest that the CER
develop a new methodology for general stand-alone anaerobic digestion facilities that receive
a combination of organic waste streams to produce biogas and/or biomethane. As noted on
page 17 of the Draft User Guide for Biomethane Projects, a biogas upgrading system is not a
requirement for all gas using facilities and may result in unnecessary parasitic loads. A general
biomethane methodology should allow the creation of ACCUs for the production of biogas, or
biogas which is upgraded to biomethane, which can either be transported to a large gas
consuming facility or injected into a gas network for end-user combustion.
A general biomethane methodology will support the growth of an emerging biogas and
biomethane market, helping large natural gas consumers to decarbonise their business
Page 2 of 6
operations. Brickworks welcomes working further with the CER and Delorean Corporation to
develop a general biomethane methodology.
1.2. Anaerobic Digestion Facility Owner (or Operator) to Create ACCUs
Brickworks supports that the anaerobic digestion facility owner (or operator) is the person that
should be eligible to create ACCUs under the biomethane methods. The owner (or operator)
of the anaerobic digestion facility is the person that takes on the financial and environmental
licensing risks for operating the facility to produce biogas and/or biomethane. Brickworks is
unclear whether the draft methodologies propose that upstream waste facility owners should
be entitled to create ACCUs from downstream anaerobic digestion facilities owned by third
parties.
1.3. Draft Biomethane Specification Should be Broadened
Biomethane can be produced with methane proportions from 65%, which an end user facility
(such as a brick plant) can combust. Biogas upgrading systems are selected based on the
composition and nature of the biomethane. Biogas upgrading processes may impose parasitic
loads, and streamlining the process design is essential to minimise inefficiencies. It would be
beneficial to avoid setting a minimum 95% methane content, which may impose unnecessary
parasitic loads.
Biomethane projects will follow appropriate planning and licencing approval pathways,
including environmental impact assessment and emission modelling. These planning and
licencing approval pathways will identify the requirements for biogas upgrading process steps
to ensure minimimal environmental impact.
Brickworks recommends that biomethane methods include biogas production where the
methane percentage is at least 65%, not the proposed 95% minimum.
Page 3 of 6
2. Conversion Abatement
Brickworks supports all anaerobic digestion facilities being capable of creating ACCUs for
conversion abatement.
3. Displacement Abatement
As a large consumer of natural gas, biomethane may be physically transported to our plant for
combustion by:
- a direct pipeline from the anaerobic digestion facility, or
- injected and blended into a natural gas network.
3.1. Biomethane Directly Transported to End-User Facility
Where biomethane is directly transported from an anaerobic digestion facility to an end-user
facility for combustion, we believe that NGERs reporting should treat biomethane similarly to
biogas (landfill gas). For biomethane combusted in an end-user facility, NGERs emissions for
the end-user facility would apply the emission factor specified under Schedule 1 Part 2 Item
30 “A biogas that is captured for combustion, other than those mentioned in items 28 and 29
(methane only)” of the National Greenhouse and Energy Reporting (Measurement)
Determination 2008 (“NGER Determination”). The current emission factor for biomethane is
6.43 kgCO2/GJ. This emission factor recognises the lower emission embodied in the biogas
or biomethane, which reduces the end-user’s emissions reported in NGERs.
In this scenario, we are unclear whether allowing the anaerobic digestion facility to create
ACCUs for natural gas displacement would result in double-counting, given that the end-user
facility already accounts for lower combustion emissions.
Page 4 of 6
3.2. Biomethane Injected and Blended into Gas Network
An end-user can enter into a biomethane gas sales agreement with an anaerobic digestion
facility (directly or via a gas retailer) to purchase biomethane that is injected into the natural
gas network. Where biomethane is injected into a natural gas network, the biomethane
molecules will blend with natural gas. Under the current NGER Determination, the end-user’s
facility will continue to combust “natural gas distributed in a pipeline”. The end-user will report
emissions in NGER by applying the emission factor under Schedule 1 Part 2 Item 17, which is
currently 51.53 kgCO2/GJ.
In this scenario, it is appropriate that the anaerobic digestion facility creates ACCUs for the
displacement of natural gas since we assume the end-user can not directly claim an emission
reduction without voluntarily surrendering ACCUs. However, we are unclear how the proposed
GreenPower change to include renewable gas will interact with ACCUs created under the draft
biomethane methodologies. In any event, a new renewable gas market (including biomethane)
will need to have mechanisms to allow the end-user to reduce their emissions if they purchase
renewable gas. We anticipate that the emerging biomethane market will evolve similarly to
how large-scale renewable electricity is sold. That is, we believe that biomethane sales
agreements will need to sell both the biomethane molecules and the associated carbon rights
(including natural gas displacement abatement) to the buyer to allow the buyer to reduce their
emissions from natural gas consumption.
An anaerobic digestion facility should not be treated differently depending on whether there is
a direct pipeline to an end-user’s facility or whether biomethane is injected into the natural gas
network. If a direct pipeline transports biomethane to an end-user’s facility, the end-user
correctly receives a permanent benefit under NGERs by applying the biogas (item 30)
emission factor, which reduces the end-user’s emissions. An anaerobic digestion facility that
injects biomethane into the natural gas network should be treated equivalently by being eligible
to create ACCUs for the displacement of natural gas for the life of the anaerobic digestion
facility.
Page 5 of 6
In this scenario, it is inappropriate to limit ACCU creation for natural gas displacement to only
12 years. Limiting the ACCU creation period disincentivises large gas consumers from buying
biomethane injected into the natural gas network after the first 12 years because they can no
longer claim an emission reduction.
I would be pleased to discuss the issues raised in this submission further with you or your
department.
Yours sincerely,
Melissa Perrow
General Manager Energy
Email: Melissa.perrow@brickworks.com.au
Page 6 of 6
